Attachment 1

Approved DLMS Change 41 

SDR Management Evaluation, Credit Adjustment Followup 

Timeframes, SA Requests for Reconsideration/

Contested Reconsideration Timeframes

1. ORIGINATOR: 

a. Service/Agency: DLMSO 

b. Originator: DoD SDR System Administrator, Ellen 

Hilert, DSN 427-0676, 703-767-0676, e-mail: 

ellen_hilert@hq.dla.mil.

2. FUNCTIONAL AREA: Supply/Supply Discrepancy Reporting

3. REQUESTED CHANGE:

a. Description of Change: This change modifies 

multiple areas of SDR guidance. 

(1) Management Evaluation. The management 

evaluation responsibilities are strengthened to include a 

semi-annual reporting requirement and specific report 

content and measurements. 

(2) Credit Adjustments on SDRs. The suggested 

minimum elapsed time for customer follow-ups for credit 

adjustments is reduced to 30 days. A reasonable followup 

timeframe where credit has not been received for return of 

discrepant material is also provided.

(3) Requests for Reconsideration. The “SDR reply 

date” which is used as a basis for the submission timeframe 

for SA customer requests for reconsideration is clarified 

as the date of the ILCO reply to the customer following 

receipt of disposition from the inventory control 

point/distribution depot. A timeframe is established for 

the ILCO to forward the customer’s request for 

reconsideration to the responsible action activity. In 

addition, a timeframe is established for the ILCO to notify 

the action activity that extenuating circumstances will 

necessitate additional time for the customer or ILCO to 

complete/process the request. This will allow the action 

activity to retain applicable records that might otherwise 

have been purged during an extensive delay.

(4) Contested Reconsideration Decisions. A 

timeframe is specified for ILCO to forward customer’s 

contested reconsideration decision to their Service focal 
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point.

(5) SA Time Standards. Timeframes for actions 

associated with requests for reconsideration and contested 

reconsideration as reflected in this approved change are 

summarized as follows:

Activity Timeframe (Days) Action

ILCO 15 Process/forward action 

activity response to original 

SDR SA customer

SA Customer 90 (from date of 

ILCO reply)

Submit request for 

reconsideration

ILCO 30 Process/forward request for 

reconsideration to action 

activity

ILCO Elapsed 120 

(90 + 30 above)

Notify action activity when 

reconsideration timeframe 

will exceed 120 days due to 

extenuating circumstances –

allows action activity to 

retain pertinent 

documentation 

Action Activity

(ICP/IMM or 

GSA)

60 Process/respond to request 

for reconsideration to ILCO

SA Customer 90 Submit contest 

reconsideration decision

ILCO 15 Process/forward contested 

reconsideration decision to 

ILCO’s Service focal point 

ILCO’s Service 

Focal Point

60 Process/respond to contested 

reconsideration decision

b. Procedures: The following paragraphs are worded 

and numbered in accordance with DLAI 4140.55, published 

January 21, 1999. Changes are identified in bold italics.

 (1) Replace paragraph E.11, Management 

Evaluation, in its entirety. Renumber as paragraph “F” and 

renumber subsequent paragraphs accordingly.
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“F. Management Evaluation. 

1. The supply discrepancy reporting program is designed to promote 

evaluation, correction, and improvement of logistics operations. To 

accomplish this objective, discrepancies as specified in this publication 

must be reported and investigated in accordance with established policies 

and procedures. DoD Components will institute SDR quality programs that 

will include periodic reviews to assess the accuracy and quality of work 

processes applicable to supply discrepancy processing. In addition, 

Components will require, as a minimum, semi-annual summary reporting to an 

appropriate headquarters for review and analysis. Components unable to 

support the full scope of the required data collection under legacy 

systems will incorporate this reporting requirement under business system 

modernization efforts. Data collected must be sufficient to enable 

monitoring activities to:

a. Identify trends

b. Establish volume and dollar values of SDRs

c. Bring management attention to problems with shipping 

activities as necessary

d. Prevent recurrence of discrepancies

2. As a minimum, the IMM/ICP and shipping activities must have 

visibility of detail/summary reports that reflect:

 a. The number of SDRs received during a particular timeframe 

by shipping activity, dollar value, and discrepancy type. Reports will 

measure compliance with SDR submission timeframes.

 b. The number of SDRs responses processed during a particular 

timeframe by action activity, dollar value, and discrepancy type. Reports 

will reflect a breakdown of SDR actions taken to include dollar value of 

credit authorized and reshipped material. Reports will measure compliance 

with SDR processing timeframes and reflect age of ongoing investigations. 

3. As a minimum, the U.S. Government receiving activity must have 

visibility of detail/summary reports that reflect:

a. The number of SDRs prepared during a particular timeframe 

by shipping activity, dollar value, and discrepancy type. Reports will 

measure compliance with SDR submission and followup timeframes. 

b. Responses received from the responsible action activity, 

and dollar values recovered, either in the form of reshipped materiel or 

credit received.” 

(2) Revise Enclosure 7, Security Assistance 

Guidance, 10. Credit Adjustments on SDRs, as follows:

“10. Credit Adjustments on SDRs.

 
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a. When an action activity has indicated that a credit adjustment 

has been authorized, reimbursement is normally provided to the fund code 

and bill-to address cited on the original requisition. When concerned 

about an apparent nonreceipt of credit, the SDR submitter should consult 

with his bill-to finance office for verification. Allow a minimum of 60

days from the date of the SDR response before initiating a follow-up 

action. To facilitate research of supply, transportation, and financial 

records, it is suggested that follow-up action for nonreceipt of credit 

associated with the return of discrepant material occur within a 

reasonable period (e.g., no longer than 45 days) after the ILCO provides 

the action activity the initial notice with evidence of discrepant 

material return. 

b. When nonreceipt of credit is confirmed, the ILCO will 

submit a request for billing adjustment as prescribed by MILSBILLS 

(Document Identifier Code FAE and billing advice code 26) or the DLMS, Vol 

7, Finance. Do not send a hardcopy of the SDR or reply, as this may create 

duplicate work for the finance centers and may cause improper processing 

of your request.”

(3) Revise Enclosure 7, paragraph 11, Time 

Standards, as follows:

 

“11. Time Standards 

a. SDR preparation and submission time by the SA customer will be 

limited to the provisions of the LOA as explained in reference A.5. 

b. ILCOs are permitted 15 calendar days from the time of receipt for 

processing discrepancy reports prior to forwarding to the appropriate 

ICP/IMM, shipping depot, or GSA action activity. Upon return of the SDR 

response from the action activity, ILCOs are permitted 15 calendar days 

for processing and forwarding to the SA customer.

c. Response time frames for the action activity are as specified in 

the basic instruction.”

 (4) Revise Enclosure 7, paragraph 14, Requests 

for Reconsideration, as follows:

“14. Requests for Reconsideration. The SA customer may ask the U.S. 

Government to reconsider the final status for an SDR. Customers must send 

written requests, to reach the ILCO within 90 calendar days from the SDR 

reply date of the ILCO reply to the customer concerning disposition as 

provided by the responsible action activity. When the customer asks for 

reconsideration, the ILCO will add a suffix code R to the SDR number (item 

2, SF 364). The ILCO will add its comments and send the SDR, together 

with all applicable correspondence/information, to the appropriate DoD 

ICP/IMM or GSA action activity for reconsideration within 30 days of 

receiving the request for reconsideration from the customer. The action 

activity will review to determine if the request should be honored, 

initiate any required action, and reply to the ILCO within 60 calendar 

days from the date of the ILCO correspondence. ILCOs will notify the 

ICP/IMM or GSA when extenuating circumstances require additional 

processing time beyond the 120 days allowed for submission and ILCO 
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research. This will allow the ICP to retain applicable documentation for 

SDR resolution.”

(4) Revise Enclosure 7, paragraph 15, Contested 

Reconsideration Decisions.

“15. Contested Reconsideration Decisions. SA customers may contest the 

DoD ICP/IMM or GSA decision on a request for reconsideration. To do so, 

the customer must send written request to reach the ILCO within 90 

calendar days from the date of the ILCO reply to the request for 

reconsideration. The customer must explain why the DoD ICP/IMM or GSA 

decision is not satisfactory. When the customer contests a DoD ICP/IMM or 

GSA decision, the ILCO will add a suffix code C to the SDR report number. 

The suffix code will be used in all references to the SDR. The SDR and 

all supporting documentation will be forwarded by letter within 15 

calendar days to the ILCO's Military Service/Agency focal point who will 

review all the information relating to the problem, see that any needed 

action is taken, and send the ILCO the final decision within 60 calendar 

days from the date of the ILCO correspondence. Copies of all information/ 

documentation relating to the request shall be included with all 

correspondence exchanged between the parties involved.”

(4) Revise Enclosure 7, paragraph 17, Credit 

Adjustments on SDRs. 

“17. Credit Adjustments on SDRs. See basic instruction. 

a. When an action activity has indicated that a credit adjustment 

has been authorized, reimbursement is normally provided to the fund code 

and bill-to address cited on the original requisition. When concerned 

about an apparent nonreceipt of credit, the ILCO should consult with the 

appropriate finance office for verification. Allow a minimum of 30 days 

from the date of the SDR response before initiating a follow-up action. 

To facilitate research of supply and financial records, it is suggested 

that follow-up action for nonreceipt of credit associated with the return 

of discrepant material occur within a reasonable period (e.g., no longer 

than 45 days after the ILCO provides the action activity the initial 

notice of discrepant materiel return).

b. When nonreceipt of credit is confirmed, the ILCO will submit a 

request for billing adjustment as prescribed by MILSBILLS (Document 

Identifier Code FAE and billing advice code 26) or the DLMS, Vol 7, 

Finance.

(5) Revise Enclosure 7, paragraph 18, Management 

Evaluation

“18. Management Evaluation. See basic instruction. General guidance is 

provided in the basic instruction at paragraph F.1. Components unable to 

support the full scope of the required data collection under legacy 

systems will incorporate this reporting requirement under business system 

modernization efforts. As a minimum, the ILCO must have visibility of 

detail/summary reports that reflect:

a. The number of SDRs received during a particular timeframe by 
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customer with breakdown by shipping activity reflecting dollar value and 

discrepancy type. Reports will measure customer compliance with SDR 

submission timeframes and ILCO compliance with SDR processing timeframes.

b. Reports will reflect a breakdown of SDR action activity response 

reflecting actions taken to include dollar value of credit authorized and 

reshipped material. 

4. REASON FOR CHANGE: 

a. This change addresses strengthened management 

evaluation in compliance with the September 1999 “Plan to 

Ensure Visibility of In-Transit End Items and Secondary Items” 

submitted to Congress in accordance with Section 349 of the 

Strom Thurmond National Defense Authorization Act for Finance 

Year 1999 and supporting DoD Component implementation plans. 

b. This change also addresses concerns elevated by DLA 

regarding the timely processing of SA SDRs. Recent resolution 

of aged SDRs has highlighted a need for clarification and 

additional instructions regarding timely customer follow-up 

for credit, particularly where credit is dependant upon the 

return of discrepant material. 

c. The term “SDR reply date” as applied to requests for 

reconsideration of SA SDR responses was open for 

misinterpretation and is therefore clarified in this change. 

An additional timeframe for ILCO processing of SA requests for 

reconsideration is provided to ensure that aged SDRs are 

forwarded expeditiously to the responsible action activity.

5. ADVANTAGES/DISADVANTAGES:

a. Advantages: Strengthens SDR management evaluation 

which will contribute to the goal of increased oversight 

and accountability of intransit material for the purpose of 

reducing vulnerability of items to fraud, waste, and abuse.

Clarifies procedures related to SA SDRs which will 

contribute to timely processing and reduce problems 

associated with researching aged shipments and material 

returns.

 

b. Disadvantages: None identified.
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6. IMPACT:

a. General. Requires modification of current Service/ 

Agency implementing procedures. May require modification 

of automated SDR detail/summary report processing and 

formats.

b. Publications. The above changes are structured in 

the DLAI 4140.55 publication format. Upon approval, 

equivalent changes will be incorporated in the DLMS.